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The Honolulu Advertiser
Posted on: Thursday, December 12, 2002

Traffic camera bill comes to $3.1 million

By Mike Leidemann
Advertiser Transportation Writer

The companies that ran Hawai'i's failed traffic camera program this year are seeking $3.1 million to settle their contract claims with the state.

A "van cam" checks for speeders in the townbound lane of Pali Highway. The program was scrapped after widespread criticism.

Advertiser library photo • Feb. 25, 2002

ACS, State & Local Solutions, which operated the photo enforcement program, and Poltech, which supplied the cameras and other equipment, submitted their claim to the state Transportation Department last month, officials said.

It seeks reimbursement for costs incurred during the program and its shutdown, "plus a fair and reasonable profit." It also asks the state to pay for the costs of preparing and negotiating the settlement claim.

ACS began operating the traffic cameras in December, but the program was ended in April after the state Legislature repealed the enabling legislation. The program was unpopular with the public and appeared doomed in state courts.

The claim, filed Nov. 14, is the first detailed accounting of what the two companies expect to be paid for their work setting up the program and costs of terminating it.

ACS, which operates similar programs in nearly 50 other North American locations, is asking for $1,622,524. Poltech, an Australian company, wants $1,497,375. They say their total allowable costs were $3.6 million, offset by nearly $500,000 in payments received.

When lawmakers were debating repeal of the program, state transportation officials warned that the costs could run as high as $6 million.

Sen. Cal Kawamoto, a strong supporter of the program, said yesterday that vendors had said all along that termination costs of the contract would be closer to $4 million or $5 million.

"This seems in line with what they were saying," said Kawamoto, D-19th (Waipahu, Pearl City).

The companies submitted their claims together, but appeared to be taking very different positions with the state.

ACS took a conciliatory approach, saying it had kept its settlement costs low by moving assets to other projects and finding a subtenant for its headquarters in Honolulu.

"These actions alone saved the state of Hawai'i in excess of $430,000," said Maurice Hannigan, ACS vice president for public safety solutions.

"We look forward to the opportunity to be of service to you again in the future," Hannigan said in a letter to former Transportation Director Brian Minaai.

Transportation spokeswoman Marilyn Kali said the department had no plans to reintroduce the traffic camera program, but Kawamoto said yesterday he would submit a bill next year to re-establish a photo enforcement program for red-light runners, probably under another operator.

"ACS is being reasonable because they still want to do business here," he said.

The red lightirunning portion of the traffic camera program never got running in Hawai'i. The cameras were put into place at several intersections but never activated.

Poltech, which supplied the 19 "van cam" and red-light cameras, originally planned to ask for more than $2.3 million from the state to cover the cost of its equipment and moving senior management to Hawai'i.

But more than $811,000 of the claim was set aside as unallowable or unsupportable by accounting firm Ernst and Young, hired by the company to review its claims before they were submitted to the state. The official claim document said Poltech might submit an additional claim later.

Earlier this month, the state hired a special deputy in the attorney general's office to assist with negotiations and a possible lawsuit.

David Karlen is a former member of the attorney general's staff, with a background in transportation issues and government claims, said Deputy Attorney General Wayne Matsuura. He was a member of a joint DOT-General Contractors Association committee to help resolve contracting problems and promote communication between the sides.

Karlen will be paid $50,000 to work on the traffic camera claims.

"Right now we're still in the process of reviewing their claim," Matsuura said. "We can either accept it or reject it."

He said the two sides probably would try to negotiate a settlement, but if no agreement is reached, "then they are free to go to court."

Reach Mike Leidemann at 525-5460 or mleidemann@honoluluadvertiser.com.